You can succeed in China if you know how the market works

China Connect 2018 was held in Paris on March 7th-8th. This event gathered the top speakers, strategist and business directors who shared their recent learnings and knowledge on operations in China, the fastest transforming market today. The speakers included top professionals as Curt Ferguson, President of Coca-Cola China & Korea, Pete Lin, Managing Director of We Are Social China and Tom Doctoroff from Prophet to mention a few. Also several influencers operating successfully in China attended the two day seminar.

China is completely different from any other market in the world. Chinese consumers are super online savvy, they have money and they aim to live in a cashless society. Everything is mobile first. The Chinese are more wired than any other nation. China is currently driven by two fundamental forces, new vs. timeless. China is a proud nation who respects their history and they do not want to become Americans but love to become new global nation with a twist. Chinese consumers are seeking a greater level of interaction with brands and products. They are attracted with brands that incorporate distinctive life-style elements and offer novelty and excitement.

Lifestyle, experience, travel and learning are the areas that grow most rapidly among Chinese consumers. Earlier the Chinese were looking for luxurious products, now they aim for unique experiences. Millennials and generation Z are becoming the major consumer groups of the China luxury market in 10 years’ time and their average age is as low as 25 years old. Young people crave for brand stories and something bolder and stronger than their parents.

Influencers or KOLs (key opinion leaders) as they are called in China have tremendous effect on millennial consumers particularly, and they are the key component in every marketing strategy of successful brands. The common mistake is to treat KOLs as a media channel – instead the brands should co-create with them to produce some unique assets and add value for the brand. Individual and influential recommendation makes the difference in China. “Brands have products to sell, KOLs have stories to tell”, says Antoine Bunel, an influential French foodie KOL operating very successfully in China. KOLs can be either powerful and expensive top influencers and celebrities or they can be more affordable and targeted micro-influencers who are kind of super fans commenting authentically and actively, generating clearly higher engagement rates with their fans. Currently, traditional media is the least important channel while KOLs are the most effective in boosting sales in China. However, they are not necessarily the cheapest alternative.

Two platform giants, Alibaba Group and Tencent, own the majority of the data on Chinese consumers. This data is only available in China and firstly for Chinese companies and start-ups. If you want to be successful in China, you need to partner with a Chinese company to get access to the data and hence to the market of endless consumer potential.

WeChat will be the next battle ground in paid social as the competition intensifies among brands and more money is required. In WeChat the brands are paying more and more to get the visibility and stand out from the crowd. New marketing and selling platforms are emerging constantly and the winning marketers evaluate and try these new opportunities actively.

AI has a special place in the Chinese economy as the government has placed it as one of the top investment priorities. It is estimated to be a USD 150 billion industry in 2030. AI effects everything in China. The current hot topics of technological development are dealing for example with facial recognition for authentification, banking and loan granting, autonomous driving, voice apps and autonomous supermarkets and various issues on health, just to mention a few. China aims to be the world leader in AI in ten years’ time.

China is a great mixture of everything: It is an emerging hyper reality powerhouse effecting heavily on the brand experience. It is a brave new world of virtual, augmented and mixed reality enabling for example cyber physical relationships, internet of buildings and VR theme parks. China has also the world’s largest sharing economy worth of USD 500 billion and it’s steadily growing. You can hire a bike, an umbrella, a basketball in a park or a car via Didi, the Chinese Uber and pay with a QR code. Mainstream Chinese are also starting the fitness and gym training as their new hobby with the aid of gamification and VR. Online self-beautification is trending high with for example animal filters and extensive capabilities of improving your face and body. Mentally, a new phenomenon is that young Chinese like to volunteer in assisting to build a more sustainable environment and are transforming their diet to vegan.

The Chinese consumers are ultra-sophisticated shoppers. They do mobile only, are very price sensitive and tech savvy and are looking for quality products and intense experiences with brands having a story to tell. As omnichannel transformation prevails, it means that the brand should be strong both on every online and offline channel. The shopping period is heavily focused on the Singles Day, November 11th which last year sold worth USD 26 billion in 24 hours.

Riikka Hallenberg

Riikka Hallenberg is Senior Client Director whose flow is generated by client work, hectic environments and cooperation with people from different cultures. Her passion is food and fashion and she loves collecting experiences. She spends all her spare time travelling.

Annika Hätönen

Annika Hätönen is Strategist operating on both Asian and European markets for our globally operating client Finnair. Her motivation is derived from international business and people. This basketball playing Mom loves her life with three vivid boys.